Róisín Shortall (Dublin North West, Labour)
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Question 35: To ask the Minister for Social Protection the way he plans to reform the social welfare system to provide greater social security for the self-employed [43859/10]

Éamon Ó Cuív (Galway West, Fianna Fail)
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Self-employed people pay PRSI class S contributions which provide cover for long-term benefits such as State contributory pensions and contributory widows pension. Unfortunately, this is the same answer I gave before.

Brendan Howlin (Wexford, Labour)
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if the Minister does not want to read it we can go directly to questions.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Does Deputy Shortall want me to read it again?

Róisín Shortall (Dublin North West, Labour)
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I heard it the first time.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I will read part of the answer. It is recognised that the current downturn in the economy is having a significant impact on many self-employed persons and the consequent reduction in their income and activity levels would be reflected in any assessment of their means from self-employment for jobseeker's allowance purposes. If a self-employed person's situation changes after he or she has made an initial claim for jobseeker's allowance, he or she can apply to have his or her means assessment reviewed in the light of his or her changed circumstances. There are no plans to extend cover for short-term benefits to this group of insured workers. Any such measure would have significant financial implications and would have to be considered within a budgetary context. Consideration would also have to be given to an appropriate increase in the rate of the PRSI class S contribution.

Róisín Shortall (Dublin North West, Labour)
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This is another area about which I asked the Minister to outline his plans for reform. He recognises, as does everybody else, that there is a significant problem and yet is doing nothing about reforming the system. There is dispute about figures. The Minister should have figures to give us a better picture of the situation. The bottom line is that self-employed people get a very poor deal from the welfare system. I am sure the Minister is aware, as are the rest of us, of many situations where people had no choice but to be self-employed over recent years because that has been the tendency in the employment market.

Does the Minister accept that there are several different categories of people who had no choice but to be self-employed because of the abuse of the system which he was prepared to stand by over recent years? People such as lorry drivers, for example, were classed as self-employed. People who were small contractors, such as plasterers and carpenters, who previously worked for someone were forced to become self-employed.

Like all of us, I am sure the Minister is aware that a great number of people only discovered they were not entitled to any assistance when they found themselves unemployed. Such people are not entitled to anything if a partner has any kind of income. Does the Minister have any plans to reform the welfare system for people who find themselves unemployed, having been self-employed?

Éamon Ó Cuív (Galway West, Fianna Fail)
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As I pointed out, in actuarial terms self-employed people, because they only pay 3% PRSI compared to 14.75%, come out much better in the long term because the most expensive benefit which everybody is paying for are pensions, be they State, contributory or widows pensions. Therefore, if the system was reformed to give short term benefits there would be a number of practical difficulties and one would have to significantly increase the level of self-employed contributions to the approximate level of the employed contributions which is 14.75%. One could not have a situation where one person was getting a lot of benefits, having contributed 14.75%, and another was getting an equal set of benefits, having contributed 3%.

That is the dilemma in this case. I accept there are challenges in this situation, as I said in my answer to the question asked by Deputy Timmins. One very successful solution we found to the problem of self-employed people in receipt of farm assist was through the rural social scheme which gave one something akin to what a stamp would give one but it was done in such a way that the person was given time which reduced the possibility of abuse of the system. I assure the Deputy that I am working in that direction and I hope to make progress in the near future.

Róisín Shortall (Dublin North West, Labour)
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Beyond looking at something, we would like to see some action. I hope the Minister will introduce these reforms in next month's budget. Is he prepared to give consideration to introducing a voluntary arrangement whereby self-employed people can pay the full stamp in order to give them the cover that is necessary in the event of them losing their employment?

Éamon Ó Cuív (Galway West, Fianna Fail)
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There are two issues. The Deputy rightly referred to money. The contribution would have to be 14.75%. The other problem is that, for example, people in employment can receive payments such as short term illness benefit after three days even though they are not at work. One is not allowed to receive the payment if one is attending one's place of work.

If one is laid off work, one can immediately sign on for unemployment benefit. It would be very difficult to monitor that in a self-employed situation and it would impose huge practical difficulties. As I said in the reply, in most European countries, there are differences between self-employed and employed on that basis.

Michael Ring (Mayo, Fine Gael)
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I have a simple question to which I know the answer but I would like the Minister to put it on the record. Deputy Shortall referred to unemployed people who were self-employed. There was a bit of confusion, in particular when the recession began, that these people could not apply for the jobseeker's allowance. Will the Minister confirm that once they provide evidence of all their means, they will be entitled to jobseeker's allowance? A number of people who were self-employed went to social welfare offices only to be told that because they were self-employed, they could not apply for jobseeker's allowance. Will the Minister put on the record the position in regard to self-employed people applying for jobseeker's allowance?

Éamon Ó Cuív (Galway West, Fianna Fail)
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It is a very good question and was the first one on which I asked for absolute clarity when I came into the Department. I have answered numerous parliamentary questions on this but I am delighted to have an opportunity once again to clarify it. A person whose income drops beneath the threshold of the family circumstances - for a single person over 25 years of age, that would be €196 - is immediately entitled to jobseeker's allowance.

As a matter of form, the Department often asks for the previous year's accounts but that is only as a guide. If a person had a contract to deliver bread, was self-employed and owned the van and the contract finished and a replacement contract was not put in place, the fact he or she had made a lot of money in the previous year would mean nothing because as long as he or she could satisfy the officials that he or she had no current income nor likely prospect of income in the immediate future, he or she could immediately get jobseeker's allowance.

Time and again, we have reinforced this message and I am delighted to be able to do so again on the record. We have also ensured that the officials in the Department are absolutely clear on the guidelines in this regard. There is a safety net.